Pa. motorists pay at the gas pump for highway money

Friday

Nov 30, 2007 at 12:01 AMNov 30, 2007 at 12:51 AM

At 32.3 cents a gallon, Pennsylvania drivers pay one of the highest state gas taxes in the country. Despite the lofty tax, an increase of more than a penny a gallon was tossed around in Harrisburg this week as a way to prevent a projected deficit in the state's Underground Storage Tank Indemnification Fund.

BETH BRELJE

At 32.3 cents a gallon, Pennsylvania drivers pay one of the highest state gas taxes in the country.

Despite the lofty tax, an increase of more than a penny a gallon was tossed around in Harrisburg this week as a way to prevent a projected deficit in the state's Underground Storage Tank Indemnification Fund.

In 2002, legislators used $100 million from the fund for the state budget. Less than a third of that amount has been repaid. And although the fund is solvent now, by 2015 it could run out of cash.

A gas tax increase was set aside for now, but since legislators brought it up, here is a look at how the price per gallon of gas is determined.

The Pennsylvania gas tax is really two taxes and a fund:

The liquid fuel tax: 12 cents a gallon. This is a fixed tax that has been the same since 1983.

Last year it generated $589 million for the motor license fund.

The oil company franchise tax: 19.2 cents a gallon.

Calculated annually, the Pennsylvania Department of Revenue determines this tax based on the average wholesale price of fuel per gallon in the previous year. In 2006, the average wholesale price was $2.08 per gallon.

Pennsylvania law caps the calculating amount at $1.25 per gallon, so the formula used to determine this tax was based on $1.25. The oil company franchise tax was raised from 18 cents in 2006. It continues for a third year in 2008 at the same rate, 19.2 cents a gallon. Last year it generated $463 million for the motor license fund.

Underground Storage Tank Indemnification Fund: 1.1 cent per gallon. The fund assists owners and operators of underground storage tanks to stay up to code. It also helps pay for repair of damaged tanks.

But wait. There's more.

The federal gas tax: 18.4 cents per gallon. This tax originated in 1932 and predates the federal highway system. The tax has remained the same since 1997 and is used for the federal highway system. Some goes back to each state for highway projects.

Grand total: In Pennsylvania, between state and federal gas tax, 50.7 cents of every gallon is tax. At $3.16 a gallon, that is 16 percent of the cost.

The diesel tax comes to 62.5 cents a gallon

Where does Pennsylvania gas tax money go? The two state taxes go to the motor license fund. The fund also collects fees from licensing, diesel tax and aviation fuel tax.

This fund goes to highway and bridge improvement and maintenance, state police highway patrols and to local governments for construction and maintenance of roads.

In 2006, the motor license fund collected $2.3 billion.

Double the money? The proposed tolls on Interstate 80 and a toll increase on the Pennsylvania turnpike would raise about $2.3 billion per year. That money is earmarked for bridge and road maintenance and improvements.